We have all heard the radio ads, seen the TV commercials or the internet ad about a new government program available for a limited time to help Canadians reduce their debt.
Remember that old saying “if it sounds too good to be true it probably is”? Well, you guessed it, there is no such government program. If there is, don’t you think the Canadian government would be promoting it and wouldn’t everyone be enrolled? After all, who wouldn’t like to have their debt eliminated through some mysterious means.
What is available is what this blog is all about, a consumer proposal. A consumer proposal is the only formal procedure available in Ontario governed by the Bankruptcy and Insolvency Act to reduce your unsecured debts. It is not a new program. Consumer proposals have been around longer than I have been in this field, and I have been working in this area since 1996. Consumer proposal are not available for a limited time only. They are written into legislation and unless the Government changes the law, they will here to stay.
I “googled” “debt reduction Canada” to see what would happen and 2.4 million results came up. I saw 12 different companies (and 1 bank) touting debt reduction programs in the first 2 pages. It is no wonder that people are confused by all of the options available. If you are in need of financial advice, let me offer you advice on what you need to look out for before you agree to any debt reduction program.
Use caution when dealing with anyone who:
- will only deal with your online or on the phone
- is not located in your locality or a major city near you
- will charge you fees to meet with you
- won’t file any paperwork until you pay them money
- guarantees results
- uses a hard sell approach
- does not offer money management counselling services as part of the debt reduction program
- tries to enroll you in a program without reviewing your entire financial situation
But the most important thing to remember is to talk to a licensed trustee for advice. A consultation is free, so there is no harm asking.